Weekly Review
Despite growing concerns of military conflict between the US and IRAN and despite relatively hawkish FOMC minutes, the market's mood was quite calm during the week starting Monday 16 February. The price of oil rose but aside from that, there was no reaction, from stocks and currencies (for the time being)
It was particularly pleasing to see the JPY / NIKKEI 'inverse correlation' return. Soft data from Japan slows the need for rate hikes and I felt the JPY was potentially shortable all week.
It was a mixed data week from the UK, below forecast employment data weakened the GBP. But continuing a long standing run of 'cold data' followed by 'hot data', RETAIL SALES came in better than expected and the BOE remains cautious regarding the timing of any further rate cuts.
Leading into the RBNZ rate decision, the market was looking for 'hawkish forward guidence'. Only to be disappointed, the NZD weakened, particularly Vs the AUD, the RBA remains the most hawkish central bank and I still consider the AUD to be a very good potential long trade.
In stock news, WALMART reported good earnings but disappointing 'forward guidence, WALMART is a very good barometer of overall economic health and disappointing guidence usually dents market sentiment. But, in line with the rest of the week's news, the S&P had very little reaction.
All in all, in a time of constant noise, it was a very quiet week. Even Friday's supreme court tariff decision couldn't provide sustained momentum. Which is perhaps not too surprising give the likelihood of workarounds and confusion.
On a personal note, my recent positive run came to an end with a break even week. A mixed bag of three trades, a win, loss and a draw.
I unfortunately missed missed any GBP or NZD short opportunities. Placing AUD JPY long on Wednesday (hit profit). Another AUD JPY long on Thursday (stopped out). Arguably there wasn't enough positivity in the air at the time, although I take a crumb of solace the chart did eventually move up to the initial profit target.
On Friday I speculated GBP USD would continue up following the tariff decision. Maybe that was a little bold, as mentioned, it wasn't too much of a surprise the market limped into the close, given the uncertainty that will come with the news.
I begin the new week with tentative thoughts of JPY short opportunities. I'll be keeping an eye on the tariff narrative. Ideally, we could do with some fresh news the market gets its teeth into (preferably positive).
Results:
Trade 1: AUD JPY +1.2
Trade 2: AUD JPY -1
Trade 3: GBP USD -0.2
Total = 0%
Total since start of blog = +55.6% (risking 1% per trade).